China‘s Labor Day E-commerce Sales Reflect Growth in Consumer Spending

Labor Day weekend in China takes place every year at the beginning of May. As the country recovers from the coronavirus crisis, the holiday this year was largely seen as a barometer for consumer spending and tourism revenues. 

To help encourage consumer spending during this time frame, the government extended the holiday from four days to five.

For the travel industry, the holiday proved to be a dud as many people elected to stay home to avoid the risk of a coronavirus surge, despite significant travel subsidies and promotions. Tourism revenue in China dropped roughly 60% from the year before.

But the e-commerce industry saw a significant improvement in consumer sentiment. Many municipality governments and e-commerce platforms dispensed subsidies and coupons to help encourage online spending. 

Statistics from China's State Post Bureau showed that Labor Day deliveries jumped by 40% YoY over the five-day period from May 1-5, showing that the e-commerce industry saw a significant recovery in orders. Express delivery logistics refers primarily to the shipment of smaller personal items; e-commerce accounts for a large percentage of this category, meaning that figures from the State Post Bureau are a proxy for e-commerce industry growth.

We take a look at figures from China's leading e-commerce platforms and find out which categories and products sold well. 

Alibaba & Tmall

 - Data released by Alibaba showed that as of May 5, Tmall's sales for the Labor Day holiday week (April 28-May 5) jumped 28.2% YoY, compared to sales in the week prior. Tmall is Alibaba's B2C brand e-commerce platform, where top F500 brands and Chinese national brands run their own flagship e-commerce stores

 - The top five categories were: female apparel, household-related products, mother and baby, home appliances, and furniture. Female consumers were primarily looking to upgrade their wardrobes to adapt to warmer weather

 - Household items made up three of the top five selling products; prolonged quarantine times have caused people to invest more heavily in their home and living spaces

 - Seasonal products saw a surge in purchases, with sales of electronic fans and air-conditioners increasing year-over-year by 380% and 120%, respectively. Additionally, refrigerator sales grew by 95% YoY.

Tmall Double Five festival banner

JD.COM

 - During the five-day Labor Day holiday from May 1-5, JD.com saw a year-over-year increase in sales of around 50%.

 - On the first day of the promotion, air conditioner sales broke the 100 million RMB (US$14 million) mark in just 4 minutes while total sales over the five-day period surpassed that of full-year sales in 2019.

 - On May 2nd, JD.com held "Super Hubei Day", which was a Super Brand Day designed to support merchants in Hubei, where the coronavirus crisis hit the hardest. 200 Hubei-based brands sold over 1000 SKUs to on the platform. According to JD.com's figures, participating brands' sales went up by 314% compared to their average sales over the past 30 days. Among all, eight Hubei brands saw sales exceed Singles Day figures last year.

 - Four TV anchors from China's state television network held a livestreaming session for appliance retailer Gome's flagship store on JD.com. The live-streaming session generated over 100 million RMB in sales.

Gome livestreaming session

Pinduoduo

 - Pinduoduo selected over 500,000 SKUs for its Labor Day festival, providing many subsidies and promotions for customers. More than 100,000 merchants held Labor Day promotions, accumulating 2 billion RMB in sales over the week from April 28 - May 5. 

 - The top-selling categories were digital electronics, food & beverage, beauty, fresh food, and department store items. Prolonged quarantine periods are leading people to invest more in digital gaming & entertainment devices. More and more people have also adopted the habit of purchasing food and snack items online

 - Pinduoduo also helped over 100 export-focused companies to open stores on its platform so that they could overcome losses from overseas order cancellations.

 - More importantly, Pinduoduo allocated large amounts of traffic and subsidies for domestic Chinese food brands. Over 100 merchants participated in the campaign, with total sales surpassing 100 millIon RMB.

Pinduoduo May Day festival banner

Little Red Book

 - Little Red Book has been turning to video content and livestreaming to help monetize its business model. On April 23rd, the content-sharing platform announced that it would allocate 10 billion RMB to support video-content creation and live-streaming hosts

 - On April 25th, Little Red Book partnered with offline department stores in Shanghai to operate livestreaming sessions for Labor Day promotions

 - From May 1-5, over 1,055 merchants carrying 1,200 brands and 20,000 SKUs participated in Labor Day promotions. In total, the platform received 506,000 orders, and sales reached 70.95 million RMB (US$10 million).